The U.S. Securities and Exchange Commission and the National Association of Securities Dealers have agreed to extend the comment period for a proposed variable annuity sales suitability rule.[@@]
The SEC is extending the comment period to Sept. 19, from Aug. 11, “to give the public additional time to comment on the proposed rule,” the agency says in a notice issued earlier this week.
The American Council of Life Insurers, Washington, had asked the SEC to extend the comment period.
In a letter to SEC Secretary Jonathan Katz, the ACLI argued that the comment period was not long enough to give those concerned time to fully study the proposed rule.
“The nominal 21-day comment period provides neither adequate opportunity for meaningful analysis of the proposal, nor a meaningful time within which to formulate comments for submission,” Carl Wilkerson, the ACLI’s chief counsel for securities and litigation, writes in the letter. “Accordingly, we would like to have a reasonable opportunity to provide input on the proposed amendments.”
The proposed regulation would impose stricter supervision requirements on broker-dealers and managers than the current regulation does, and the SEC’s decision to allow a shortened initial comment period of 21 days, as opposed to the standard 5 weeks, was seen by some observers as an indication that the commission would act swiftly to implement the rule.
The NASD developed the proposed rule in response to findings by the SEC and the NASD that supervision of variable annuity marketing has been lax. Regulators found that some of the annuities sold were inappropriate investment vehicles for the purchasers, and investigators were especially critical of some sales of variable annuities to older consumers.